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J&J acquires DePuy
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July 21, 1998: 6:12 a.m. ET
Johnson & Johnson buys orthopedic device maker, Roche sells its stake
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NEW YORK (CNNfn) - Johnson & Johnson said Tuesday it has agreed to acquire orthopedic device maker DePuy Inc. in a stock deal valued at $3.5 billion.
After six months of nearly flat sales, Johnson & Johnson had been looking for another medical device company to jump-start its lagging top-line growth, and the planned acquisition of DePuy was expected to go some way toward helping the company return sales growth to double digits.
Also, Swiss pharmaceutical giant Roche Holding Ltd., which owns 84 percent of the outstanding shares of DePuy, said Tuesday it had agreed to sell its stake in the company to Johnson & Johnson at $35 per share for a total purchase price of $2.9 billion.
Roche said in a statement it wanted to focus on its core businesses of pharmaceuticals and diagnostics.
Johnson & Johnson will begin a cash tender offer for all outstanding shares of DePuy for $35 per share. The offer is expected to start July 27 and will remain open for a minimum of 20 business days.
DePuy has approximately 99 million shares outstanding. Any shares not purchased in the offer will be acquired for the same price in cash in a second-step merger.
Both Johnson & Johnson and DePuy boards of directors have approved the transaction.
Johnson & Johnson said the new orthopedic entity would be known as DePuy, a Johnson & Johnson Company.
With 1997 sales of $22.6 billion, Johnson & Johnson is a highly diversified medical product company with a line that ranges from prescription drugs to Band-Aids and contact lenses.
Shares of Johnson & Johnson (JNJ) fell 7/16 to close at 77-1/8 in Monday trading. DePuy (DPU) shares gained 7/8 to close at 31-1/2. 
-- from staff and wire reports
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